Sierra Vista Bank Earns $68,000 in 3Q12

FOLSOM, CA--(Marketwire - Oct 26, 2012) - Sierra Vista Bank (OTCQB: SVBA) today reported earnings of $68,000, or $0.03 per share compared to earnings of $132,000 or $0.07 per share one year earlier. The quarter reflected a strong net interest margin, and stable asset quality. All financial results are preliminary and unaudited. 

Additionally, the Bank completed its public capital offering during the quarter which after expenses increased common equity by a total of $2.0 million. "The additional capital had a positive impact on the Bank's capital ratios which in turn will allow Sierra Vista Bank to grow and increase its lending limits," said Gregory Patton, President and CEO. "This significantly strengthens our financial position and we will be better able to offer quality banking opportunities to the communities we serve," stated Patton.

Financial Highlights (at or for the quarter ended September 30, 2012)

• The net interest margin was 4.93% for the third quarter versus 4.88% the previous quarter.
• Non-interest bearing deposits represented 35% of total deposits at September 30, 2012.
• Operating expenses were down to $935,000 in the third quarter, versus $974,000 one quarter earlier.
• Provisions for loan losses declined to $60,000, 25% lower than the previous quarter of $80,000, and well below the $225,000 one year earlier.
• Capital levels increased and remain well above the regulatory "well-capitalized" minimum levels:
  • The Tier 1 Leverage Capital ratio improved to 12.16% compared to 9.25% one quarter earlier.
  • The Tier 1 Risk Based Capital ratio improved to 15.66% compared to 12.99% a quarter earlier.
  • The Total Risk Based Capital ratio improved to 16.92% compared to 14.25% at June 30, 2012.
• Book value was $3.00 per share compared to $3.73 per share at June 30, 2012.
• Non-performing assets as a percent of total assets were 4.84% compared to 5.01% one quarter earlier.

Sierra Vista had total assets of $77.9 million at September 30, 2012, compared to $78.5 million at June 30, 2012. Net loans increased to $58.4 million at the end of September compared to $54.4 million at June 30, 2012. Deposits totaled $66.8 million at September 30, 2012, compared to $70.6 million at June 30, 2012. Non-interest bearing deposits remained stable at $23.4 million or 35.0% of total deposits at September 30, 2012, compared to $24.1 million or 34.1% of total deposits at June 30, 2012. 

"With the exception of $128,000, all non-accruing loans are either paying as agreed and current under their original terms, or paying as agreed under forbearance agreements," noted Lesa Fynes, Chief Financial Officer. "We are realizing revenue streams or principal reductions from most non-performing assets including the Bank's $1.6 million in OREO which consists mainly of the Bank's headquarters building in Folsom. 

Non-performing assets totaled $3.77 million at the end of September 2012 compared to $4.41 million at the end of December 2011. Non-performing assets include loans classified as non-accrual of $2.19 million and real estate owned of $1.58 million at September 30, 2012. The real estate owned balance of $1.58 million includes the Bank's headquarters totaling $1.47 million.

About Sierra Vista Bank
Sierra Vista Bank is a locally owned community bank headquartered at 1710 Prairie City Road in Folsom, California since March 2007 and has a branch located in the Sam's Town Center in Cameron Park. The Bank prides itself on serving the financial needs of small businesses and professionals in Folsom and throughout the Highway 50 Corridor while remaining committed to community philanthropy. Additional information about Sierra Vista Bank can be found at www.sierravistabank.com or by calling (916) 850-1500.

Forward Looking Statement:
In addition to historical information, this press release includes forward-looking statements, such as statements regarding increases in non-interest income, future profitability, the bank's ability to address challenges impacting economy in which it operates and future loan losses, which reflect management's current expectations for the bank's future financial results and business prospects. Forward-looking statements are inherently subject to risks and uncertainties, and actual results could differ materially from those currently anticipated due to a number of factors, which include, but are not limited to: (a) changes in competitive pressures among depository and other financial institutions or in the bank's ability to compete effectively against larger financial institutions in its banking market; (b) actions of government regulators or changes in laws, regulations or accounting standards, that adversely affect the bank's business; (c) changes in interest rates and/or inflation; (d) changes in general economic or business conditions and the real estate market in the bank's market; and (e) other unexpected developments or changes in the bank's business or its customers' businesses. Such risks and uncertainties could cause results for subsequent interim periods or for the entire year to differ materially from those indicated. You should not place undue reliance on the forward-looking statements, which reflect management's view only as of the date hereof. The Bank undertakes no obligation to publicly revise these forward-looking statements to reflect subsequent events or circumstances.

SIERRA VISTA BANK
CONSOLIDATED BALANCE SHEETS
(unaudited)
($000s)					9/30/12				6/30/12				9/30/11
ASSETS
Cash and due from banks				$	2,856			$	3,480			$	3,390
Federal funds sold					970				4,445				5,445
Investment securities, available-for-sale					12,762				12,921				10,019
Gross loans					59,805				55,844				63,124
	Net deferred (fees)				(33	)			(23	)			(39	)
	Allowance for loan losses				(1,343	)			(1,381	)			(1,900	)
		Net loans			58,429				54,440				61,185
Premises and equipment, net					750				786				853
Accrued interest receivable					247				295				277
Other real estate					1,581				1,581				1,085
Other assets					307				579				395
TOTAL ASSETS				$	77,902			$	78,527			$	82,649
LIABILITIES AND STOCKHOLDERS' EQUITY
Noninterest-bearing demand deposits				$	23,416			$	24,059			$	24,587
Interest-bearing demand deposits					2,714				2,110				1,930
Savings and money market deposits					13,439				13,659				14,465
Time deposits					27,266				30,758				33,101
TOTAL DEPOSITS					66,835				70,586				74,083
FHLB borrowings					1000				0				0
Accrued interest payable					17				25				28
Accounts payable and other liabilities					349				332				383
TOTAL LIABILITIES					68,201				70,943				74,494
Common stock					19,727				17,727				17,727
Additional paid-in capital					377				377				377
Accumulated deficit					(10,517	)			(10,588	)			(10,071	)
Accumulated other comprehensive income					114				68				122
TOTAL STOCKHOLDERS' EQUITY					9,701				7,584				8,155
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY				$	77,902			$	78,527			$	82,649

SIERRA VISTA BANK
CONSOLIDATED INCOME STATEMENTS
(unaudited)
				For the Three Months Ended:												For the Nine Months Ended:
($000s, except per share data)				9/30/12				6/30/12				9/30/11				9/30/12				9/30/11
Interest income
	Loans			$	896			$	897			$	1,023			$	2,722			$	3,152
	Investment securities				67				82				97				223				276
	Federal Funds sold				2				3				2				10				8
		Total interest income			965				982				1,122				2,955				3,436
Interest expense
	Deposits				43				55				86				166				339
	FHLB borrowings				-				-				22				1				32
		Total interest expense			43				55				108				167				371
		Net interest income			922				927				1,014				2,788				3,065
Provision for loan and lease losses					60				80				225				950				480
	Net interest income after provision for loan losses				862				847				789				1,838				2,585
Noninterest income
	Customer service and other fees				121				125				50				332				168
	Gain (loss) on sale of loans				-				-				-				-				15
	Gain (loss) on sale of other real estate				-				-				7				56				5
	Gain (loss) on available-for-sale securities				20				107				224				152				224
		Total noninterest income			141				232				281				540				412
Noninterest expense
	Salaries and employee benefits				495				539				470				1,557				1,423
	Occupancy and equipment				157				151				169				463				506
	Other general and administrative				283				284				299				882				973
		Total noninterest expense			935				974				938				2,902				2,902
		Net income (loss)		$	68			$	105			$	132			$	(524	)		$	95
Earnings (loss) per share				$	0.03			$	0.05			$	0.07			$	(0.24	)		$	0.05
Tangible book value per share				$	3.00			$	3.73			$	3.99			$	3.00			$	3.99
Net interest margin					4.93	%			4.88	%			5.09	%			4.87	%			5.02	%
Asset Quality:
Non-performing loans to total loans					3.66	%			4.21	%			3.07	%			3.66	%			3.07	%
Non-performing assets to total loans and ORE					6.14	%			6.85	%			4.71	%			6.14	%			4.71	%
Non-performing assets to total assets					4.84	%			5.01	%			3.66	%			4.84	%			3.66	%
Allowance for loan losses to total loans					2.25	%			2.47	%			3.01	%			2.25	%			3.01	%
Allowance for loan losses to non-performing loans					61.30	%			58.69	%			98.09	%			61.30	%			98.09	%
Other real estate				$	1,581			$	1,581			$	1,085			$	1,581			$	1,085
Selected Financial Ratios:
Tier 1 leverage capital ratio					12.16	%			9.25	%			9.71	%			12.16	%			9.71	%
Tier 1 risk-based capital ratio					15.66	%			12.99	%			12.80	%			15.66	%			12.80	%
Total risk-based capital ratio					16.92	%			14.25	%			14.07	%			16.92	%			14.07	%